Liberty, Klesch wire DT cable stake
John Malone is further flexing his muscle across the Euro Continent.
His company Liberty Media and investor Gary Klesch’s eponymous outfit have signed a letter of intent to buy majority stakes in six of nine regional cable systems owned by Deutsche Telekom.
The $2 billion deal makes Liberty a major player in German cable with a hold on 10 million cable households. It’s expected to close midyear. The auction of the telco’s cable assets has been ongoing for the past two years by order of Euro regulators.
Deutsche Telecom maintains stakes in each of the nine regional systems, which together pass 17 million cable households. Germany is the world’s largest TV market outside the U.S.
Liberty and Klesch & Co. (Klesch’s London financial arm) will take 55% stakes in the systems as well as acquire Deutsche Telecom subsid MediaServices, which houses DT’s digital platform.
The agreement is likely to speed the upgrade of Germany’s cable systems for digital and broadband services such as video-on-demand. DT had been accused of dragging its feet on the sale, slowing down the development of new cable technology in Germany and hindering competition.
Klesch and Liberty will face a massive investment to upgrade the systems.